Sunday, February 26, 2017

The Daily, Part 1 of 3, 2-25-17

* * * *
2/25/2017 Investment House Daily
* * * *

Investment House Daily Subscribers:

MARKET ALERTS:

Targets hit: None issued
Entry alerts: None issued
Trailing stops: None issued
Stop alerts: None issued

The market alert service is a premium level service where we issue intraday
alerts relating to the general market conditions, when stocks hit action
points (buy, stop, target, etc.), and when we see other information
impacting the market or our stocks. To subscribe to the alert service you
can sign up at the following link:
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********************************************************************
The Market Video is DIVIDED into component parts: Market Overview, Economy,
Technical Summary, and the Next Session. Choose the segments you are
interested in without having to search a longer video. Click on the link to
the portion you wish to view.

TO VIEW THE MARKET OVERVIEW CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/mo/mo.mp4

TO VIEW THE TECHNICAL SUMMARY VIDEO CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/ts/ts.mp4

TO VIEW THE NEXT SESSION VIDEO CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/nxt/nxt.mp4
********************************************************************

The REPORT SCHEDULE is as follows:

Market Summary Video, Plays and Play Videos, and Play Table with play
annotations will issue Wednesday, Weekend.

Monday a Market Summary video, new plays, play table annotations.

Tuesday and Thursday reports will contain the market summary, chart links to
view the index charts, and updated play table.

Access to all current videos will remain assessable each day using the play
links in the reports.

If any market circumstances arise where we see additional plays we want to
prepare for the next session, we will of course issue those plays regardless
of the day of the week.

MARKET SUMMARY

- Stocks start lower, continuing the Thursday weakness, then the indices
mostly recover.
- Sellers just cannot get the job done thus far.
- The recovery is good for the most part, but some leaders are problematic
at best.
- Economic recovery hope versus reality: is the administration listening to
the right people?
- Key leadership groups take a hit, some sport leader breakdowns.
- This week the rally attempts to hold against weak internals, rising
sentiment, some leaders breaking lower.

What a comeback. After a Thursday that saw stocks sell and recover in some
cases, Friday opened down with some 40+ point losses on NASDAQ. SP500 and
DJ30 were mostly fine on the session, but growth was way off the upside
pace.

Once again, however, the sellers did not have their way. From the open
stocks started to recover off the early weakness, moved into midmorning and
worked laterally to the last hour. Then a 'miraculous' recovery in the last
hour pushed all but RUTX and SOX positive.

SP500 3.53, 0.15%
NASDAQ 9.80, 0.17%
DJ30 11.44, 0.05%
SP400 0.13%
RUTX -0.01%
SOX -0.04%

Yes, once again the sellers tried but it was a half-hearted effort, and as
soon as they didn't press the move the buyers bought back in. The indices
bounced off the 10 or 20 day EMA, as the case may be, and recovered most of
the downside.

Can you trust that recovery? Not on a Friday on a short week when the
sellers give it a shot on the week. Thus we were not buying on the day.
But, there are still many leaders that, while they were boxed around some on
the week, held up well and indeed even have some pretty nice entry setups.

That means we are still looking at the upside predominantly as the trends
held, are still holding, and the leaders are, most of them that did test,
setting up some potential new entry points. It may be that Friday was just
a short covering move or a buy on the dip bounce to close the week. As
there are not that many shorts, covering seems to be a rather absurd
conclusion.

I have to say that that some leaders did break on the week. NVDA broke the
50 day MA's after the last rally attempt failed to take out the prior high
in December. But that is okay. Cramer Friday was talking his hedge fund
knowledge saying that there were momentum 'battleground stocks' and you just
don't get in until the battle is over.

That is true: let the fight between the buyers and sellers get resolved and
then move in. What gets me about every one of these TV pundits is that they
always say selling is okay, just buy it when the pullback is over. Well,
not everyone has a hedge fund using other people's money. Cramer was
touting NVDA up to the point it rolled over. Now he is saying buy it when
the battle is over. With what, the profits you don't have now that a stock
that was touted as a core holding a couple of weeks ago sells off? It is
always the same story when selling crops up: just buy it on the dip! They
always skip, however, that transition from strong buy to buy it after it
sells off. And, of course, no one says one thing about it. Fake news or
just a momentary lapse?


NEWS/ECONOMY

It was the best of times, it was the worst of times. New records on the
stock indices, sentiment reports surging, but the 'hard' economic data still
turning in disappointing results.

Gasoline demand fell 5.2% the past week, the second week of demand drop and
this after GS said the prior week's and general demand trend points to
recession. Happy spring! I would say the groundhog was wrong this year;
saw his shadow but it is spring everywhere you go.

The Fed's national activity Index in January turned negative. Counter that
with Small Business sentiment expecting the economy to grow jumping to 54%
from 29% in the summer of 2016. Lots of hope, not a lot of real activity.

One of the more disappointing, even disturbing, stories of the week was the
Trump meeting with CEO's. He wanted to discuss creating jobs and growing
the economy. Sound great. When the meeting was over, however, the CEO's
said that the main problem was not a lack of jobs but a lack of skilled
workers, pushing again for more of the H-1b visas to let more cheaper
foreign workers in.

If I was Trump I would have to ask, 'was that the problem at Disney?'
Recall management called much of the senior staff into a meeting and
abruptly told them they were going to be laid off. Moreover, they had to
train their replacements, and if they did not, no severance. Many of the
Disney employees told reporters that the people brought in from overseas to
replace them knew NOTHING about the jobs they were hired to fill. No
skills?

I would also have to ask about the tens upon tens of thousands of US
citizens, educated at US universities in STEM degrees (science, technology,
engineering, mathematics) who do not have jobs and are living with their
parents. What about them filling those jobs? Even if it is not a perfect
match, these are highly educated, and presumptively highly intelligent
people who could, with minimal training, do the job. I mean Disney had to
force terminated employees to train their clueless replacements. How hard
could it be to teach someone already in the country to do the job?

Beyond that, they need to get to the root of the problem as to why companies
feel compelled to choose America last for workers: the ability to compete
internationally thanks to our tax code. The US taxes citizens and
corporations no matter where they live in the world. You could live in
Spain for five years, never coming to the US during that time, and the US
would still say you owed the US taxes on what you earned in that country.
That applies to corporations as well. Talk about building in a massive
disadvantage and yes disincentive to for US companies.

Instead of importing a bunch of foreign workers, go ahead and lower the
taxes, change the foreign collection practices, and make it where US
companies are more competitive without feeling the need to cut out American
workers for cheaper foreign workers. Sure that is not a dollar for dollar
trade with a cheaper worker, but there are other ways to level the playing
field. 0% corporate rates would help the corporations and the consumer,
lowering prices all around.

That, of course, makes too much sense. Instead they are playing with a
border tax that only raises prices to US consumers and does not help US
exporters move goods to our NAFTA partners due to taxes that make end runs
around that trade agreement. Negotiate to get trade truly free between our
countries so US companies, small and large alike, can compete and sell their
goods across borders.

Trump needs to meet with a bunch of small business owners, several times, to
see what the real obstacles and the changes that would benefit all
businesses versus just the big corporations and their lobbying that gets
them the best deals.


THE MARKET

CHARTS

A bit volatile on the week, but in the end holding near support, either the
10 or the 20 day EMA. If that is the best the sellers can do . . . Of
course it is not and the internals and sentiment are at levels with a
negative bias for stocks. A bit of volatility with those indications adds
to some of the negatives, but then again, the trends refuse to give up at
this juncture.

NASDAQ: Looked a bit toppy starting Wednesday, but after a Thursday test of
the 10 day EMA and Friday opening back at that level, NASDAQ rebounded to
post a slightly higher week. Still moving up the 10 day EMA.

SP500: Same action as NASDAQ, putting in new highs then flattening out,
selling to the 10 day EMA, but recovering to hold the moves.

DJ30: Pretty much rising each session with no signs of topping out.

SOX: Surged to a new high Tuesday, stalled Wednesday, sold Thursday and on
the Friday open. Rebounded to flat Friday, holding the trend rising above
the 20 day EMA. Many chips struggled, but closed out the week looking
promising once again.

SP400: Same action as SOX, i.e. a new high Tuesday, fading back Wednesday
and Thursday and to start Friday. Bounced Friday off the 20 day EMA.

RUTX: Solid Tuesday move as well then a drop Wednesday to the Friday low,
but held the 20 day EMA Friday and rebounded to a nice tight doji with tail.
Tested the top of the lateral range from late 2016, early 2017 and held.
That looks quite solid.


LEADERSHIP

Metals: Breaking down late last week and didn't recover much Friday. AKS,
SCHN, STLD, FCX.

Materials: From great moves higher to rolling over. LPX gapped lower
Friday. CX is struggling but has set up an ABCD. EXP is trying to hold the
50 day MA's.

Industrial machinery: Weak Thursday, tried to recover Friday with not a lot
of success. CMI, CAT, TEX.

Chips: NVDA tried to recover some Friday and did a decent job but the
pattern is still damaged. MU, XLNX testing the 50 day MA's. Some solid
leaders struggled some late week but held up quite well: AMD, MCHP, SWKS,
SLAB. Others are in great position: MVIS.

China: Some remain solid: JD, YNDX, ATHM, BABA. Others had a tougher week,
e.g. SINA, BIDU, both on earnings. Some were weak but managed to recover,
e.g. SOHU.

FAANG: FB looks ready to start upside again. AAPL continues trending
upside. NFLX trying to hold the 20 day EMA and bounce. GOOG is trying to
take on the late January peak.

Financial: All tested late week on the bond rally and rate drop. All okay
in their patterns, just knocked around some.


MARKET STATS

DJ30
Stats: +11.44 points (+0.05%) to close at 20821.76

Nasdaq
Stats: +9.8 points (+0.17%) to close at 5845.31
Volume: 1.668B (-10.52%)

Up Volume: 858.89M (+94.45M)
Down Volume: 767.66M (-312.34M)

A/D and Hi/Lo: Decliners led 1.17 to 1
Previous Session: Decliners led 1.47 to 1

New Highs: 108 (-131)
New Lows: 51 (+15)

S&P
Stats: +3.53 points (+0.15%) to close at 2367.34
NYSE Volume: 890M (-0.89%)

A/D and Hi/Lo: Advancers led 1.07 to 1
Previous Session: Advancers led 1.16 to 1

New Highs: 119 (-99)
New Lows: 27 (+11)


SENTIMENT INDICATORS

VIX: 11.47; -0.24
VXN: 12.75; -0.54
VXO: 10.65; -0.07
Put/Call Ratio (CBOE): 0.83; 0


Bulls and Bears: Bulls backed off again but remain over 61%. 6 of 8 weeks
over 60%. Bears held steady at low levels.

Bulls: 61.2 versus 61.8

Bears: 17.5 versus 17.6

Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.





Bulls: 61.2 versus 61.8
61.8 versus 62.7 versus 61.8 versus 58.2 versus 60.6 versus 58.6 versus 60.2
versus 59.8 versus 59.8 versus 59.6 versus 58.8 versus 56.3 versus 55.6
versus 51.0 versus 42.9 versus 41.7 versus 47.1 versus 42.9 versus 46.1
versus 46.7 versus 45.2 versus 44.6 versus 49.0 versus 52.5 versus 55.9
versus 56.7 versus 56.2 versus 54.3 versus 52.9% versus 53.9% versus 54.4%
versus 52.5% versus 47.1% versus 41.6% versus 47.5% versus 45.9% versus
47.3% versus 45.4% versus 35.4% versus 40.2 versus 39.2

Bears: 17.5 versus 17.6
17.6 versus 16.7 versus 17.6 versus 17.5 versus 17.3 versus 18.3 versus 18.4
versus 19.6 versus 19.6 versus 19.2 versus 19.6 versus 22.3 versus 21.6
versus 23.5 versus 25.7 versus 24.3 versus 23.1 versus 23.8 versus 23.1
versus 22.8 versus 23.1 versus 24.3 versus 22.6 versus 22.8 versus 20.6
Versus 20.2 versus 20.0 versus 20.9% versus 21.2% versus 21.6% versus 23.3%
versus 24.7% versus 24.5% versus 23.8% versus 23.2% versus 23.5% versus
23.8% versus 23.7% versus 24.0% versus 21.7% versus 21.6% versus 21.7 versus
20.6% versus 21.7% versus 27.8% versus 27.8% versus 28.9% versus 27.8%
versus 30.3% versus 35.4%


OTHER MARKETS

Bonds (10 year): 2.31% versus 2.38%. Bonds gapped upside Friday, matching
the high from early February.

Historical: the last sub-2% rate was in November 2016 (1.867%). 2.38%
versus 2.42% versus 2.43% versus 2.42% versus 2.45% versus 2.50% versus
2.473% versus 2.43% versus 2.41% versus 2.398% versus 2.340% versus 2.393%
versus 2.41% versus 2.48% versus 2.474% versus 2.477% versus 2.44% versus
2.49% versus 2.48% versus 2.512% versus 2.52% versus 2.467% versus 2.40%
versus 2.47% versus 2.468% versus 2.422% versus 2.372% versus 2.393% versus
2.358% versus 2.365% versus 2.38% versus 2.962% versus 2.42% versus 2.357%
versus 2.45% versus 2.448% versus 2.42% versus 2.48% versus 2.51% versus
2.56% versus 2.54% versus 2.55% versus 2.54% versus 2.564% versus 2.544%
versus 2.59% versus 2.59% versus 2.52% versus 2.473%


EUR/USD: 1.05616 versus 1.05830

Historical: 1.05830 versus 1.0557 versus 1.05474 versus 1.06108 versus
1.06665 versus 1.06148 versus 1.05762 versus 1.06023 versus 1.06411 versus
1.06557 versus 1.06825 versus 1.06814 versus 1.07219 versus 1.07880 versus
1.07605 versus 1.07892 versus 1.0791 versus 1.07294 versus 1.06957 versus
1.06843 versus 1.0683 versus 1.0756 versus 1.07274 versus 1.0761 versus
1.07027 versus 1.06394 versus 1.06381 versus 1.07114 versus 1.06450 versus
1.0624 versus 1.05982 versus 1.0555 versus 1.0585 versus 1.05346 versus
105837 versus 1.0525 versus 1.03914 versus 1.05289 versus 1.05155 versus
1.04357 versus 1.04636 versus 1.0451 versus 1.04368 versus 1.04412 versus
1.0392


USD/JPY: 112.169 versus 112.745. Dollar weakened on the week, heading back
near the early February lows.

Historical: 112.745 versus 113.324 versus 113.399 versus 112.906 versus
113.356 versus 113.880 versus 114.306 versus 113.65 versus 113.856 versus
113.265 versus 113.401 versus 112.207 versus 112.332 versus 111.815 versus
112.567 versus 112.903 versus 112.68 versus 112.50 versus 114.493 versus
115.094 versus 114.469 versus 113.362 versus 113.850 versus 112.736 versus
114.39 versus 114.686 versus 114.538 versus 112.774 versus 114.473 versus
114.57 versus 114.70 versus 115.811 versus 116.023 versus 116.923 versus
115.93 versus 116.46 versus 117.983


Oil: 53.99, -0.46. Tried the breakout again, struggled again at the top of
the range.


Gold: 1258.30, +6.90. Strong break higher Thursday and Friday, moving to
the 200 day SMA. As with bonds, surprising strength, based mostly on the Fed
not going to do anything and the notion Trump will not get his policies
moving.


MONDAY

A volatile week that started stronger, ended problematic, but the bids were
still ready on the dip and the indices recovered and held the trends. Thus,
a bit more testy, but holding the trends higher with bids returning when
some modest selling hit.

Yes, overall it was modest though some leaders did get hit. Chinese stocks
had some leaders really struggle. Chips had some issues, and though most
recovered, some big names did not and others are still problematic.

Basically the market started to see some leaders struggle: materials,
metals, industrial equipment, some chips, some China. If leaders cannot
hold the line and those struggling roll over, the market rally is in
jeopardy. Makes sense given the issues with internals and sentiment.
Leaders are the last peg and the past week's struggles have to keep everyone
on guard.

That said, the trends remain in place. There are still plenty of leading
stocks holding up well and more setting up or upside moves. Thus despite
the issues in the struggling leaders, others look ready to step into their
place. So, we have some good-looking upside plays still ready to go. We
will see how they move and how the others hold the line. If the new stocks
cannot break higher and if those hanging on fail, the rally likely tests
deeper.

Have a great evening!


SUPPORT AND RESISTANCE

NASDAQ: Closed at 5845.31

Resistance:

Support:
5661 is the late January upper gap point
The 50 day EMA at 5620
5601 is the January lower gap point
The 50 day SMA at 5599
The 2016 trendline at 5559
The November prior all-time high at 5404
5340 is the September and October 2016 twin peaks
5287.61 is the September 2016 high
5271.36 is the August 2016 intraday prior all-time high
The 200 day SMA at 5242
5231.94 is the 2015 all-time high
5170 is the October intraday low.
5162 is the early November peak, 5176 is the December intraday peak
5100 from the April peak and early May peak
5042 is the March 2015 high
5008.57 is the early March 2015 post-bear market high
5007 is the 12/31 upper gap point from that big gap lower
4999 is the October upper gap point
4980 is the June 2016 peak
4969 is the April 2016 recovery high
4960 is the September 2015 intraday high, an important reversal point for
NASDAQ.
4920 is the lower gap point from mid-October 2015, the January 2016 lower
gap point
4916 is the mid-November 2015 low
4899 - 4902 from the September 2015 peak, July 2015 low
4894 is the September 2015 closing high


S&P 500: Closed at 2367.34

Resistance:

Support:
The 2016 trendline at 2309
2301 is the late January 2017 high
The 50 day SMA at 2288
The 50 day EMA at 2289
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The November 2016 all-time high at 2213.25
2194 is the August 2016 prior all-time high
The 200 day SMA at 2179
2175 is the June 2016 high
2135 is the May 2015 all-time high
2130 is the June 2015 peak
2126 was the April 2015 prior all-time high
2120 is the June 2016 peak
2119 is the September 2016 low; February 2015 intraday high
2116 is the November 2015 high
2111 is the April 2016 recovery high
2104 is the December 2015 high
2094 is the December 2014 high
2079 is the intraday all-time high from November 2014
2062 is the January 2015 lower high
2046 is the July 2015 closing low
2040 is the March 2015 closing low


Dow: Closed at 20,821.76

Resistance:

Support:
20,126 is the January 2017 intraday high
20,101 is the late January closing high.
The 50 day SMA at 20,080
The 50 day EMA at 20,016
19,994 - 19,999 (early January high, upper gap point from late January
19750 is the lows of the December/January range
The 200 day SMA at 18,733
18,669 is the August 2016 all-time high
18,595 is the July 2016 peak
18,351 is the prior all-time high from May 2015
18,288 from March 2015
18,262 is the upper gap point from the Monday gap lower.
18,247 is the August 2016 low
18,168 is the April 2016 recovery high
18,100 to 18,181: interim peaks in the December 2014 to July 2015 range
18,016 is the June 2016 peak
17,992 is the early September low
17,978 is the November 2015 peak
17,960 is the October intraday low
17,600 is the rough bottom of the April to June range.
17,351 is the September 2014 all-time high.


ECONOMIC CALENDAR

February 27 - Monday
Durable Orders, January (8:30): 1.8% expected, -0.4% prior
Durable Goods -ex tr, January (8:30): 0.5% expected, 0.5% prior
Pending Home Sales, January (10:00): 0.9% expected, 1.6% prior

February 28 - Tuesday
GDP - Second Estimate, Q4 (8:30): 2.1% expected, 1.9% prior
GDP Deflator - Second, Q4 (8:30): 2.1% expected, 2.1% prior
Adv. International T, January (8:30): -$65.0B prior
Adv. Wholesale Inventories, January (8:30): 1.0% prior
Chicago PMI, February (9:45): 53.0% expected, 50.3% prior
Consumer Confidence, February (10:00): 111.5 expected, 111.8 prior

March 1 - Wednesday
MBA Mortgage Applica, 02/25 (7:00): -2.0% prior
Personal Income, January (8:30): 0.4% expected, 0.3% prior
Personal Spending, January (8:30): 0.3% expected, 0.5% prior
PCE Prices - Core, January (8:30): 0.2% expected, 0.1% prior
Construction Spendin, January (10:00): 0.6% expected, -0.2% prior
ISM Index, February (10:00): 56.1 expected, 56.0 prior
Crude Inventories, 02/25 (10:30): +0.6M prior
Auto Sales, February (14:00): 4.67M prior
Truck Sales, February (14:00): 9.22M prior

March 2 - Thursday
Challenger Job Cuts, February (7:30): -38.8% prior
Initial Claims, 02/25 (8:30): 244K expected, 244K prior
Continuing Claims, 02/18 (8:30): 2060K prior
Natural Gas Inventor, 02/25 (10:30): -89 bcf prior

March 3 - Friday
ISM Services, February (10:00): 56.5% expected, 56.5% prior

End part 1 of 3
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Sunday, February 19, 2017

The Daily, Part 1 of 3, 2-18-17

* * * *
2/18/2017 Investment House Daily
* * * *

Investment House Daily Subscribers:

MARKET ALERTS:

Targets hit: BLUE
Entry alerts: IP; MET; SWKS
Trailing stops: None issued
Stop alerts: NUS

The market alert service is a premium level service where we issue intraday
alerts relating to the general market conditions, when stocks hit action
points (buy, stop, target, etc.), and when we see other information
impacting the market or our stocks. To subscribe to the alert service you
can sign up at the following link:
http://www.investmenthouse.com/alertdaily.html

********************************************************************
The Market Video is DIVIDED into component parts: Market Overview, Economy,
Technical Summary, and the Next Session. Choose the segments you are
interested in without having to search a longer video. Click on the link to
the portion you wish to view.

TO VIEW THE MARKET OVERVIEW CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/mo/mo.mp4

********************************************************************

The REPORT SCHEDULE is as follows:

Market Summary Video, Plays and Play Videos, and Play Table with play
annotations will issue Wednesday, Weekend.

Monday a Market Summary video, new plays, play table annotations.

Tuesday and Thursday reports will contain the market summary, chart links to
view the index charts, and updated play table.

Access to all current videos will remain assessable each day using the play
links in the reports.

If any market circumstances arise where we see additional plays we want to
prepare for the next session, we will of course issue those plays regardless
of the day of the week.

MARKET SUMMARY

- Expiration fights off a slow open to close positive.
- SOX perhaps coming back to life after a test.
- Few stocks breaking down but upside plays harder to find.
- Coming week very instructive as to how leaders finish their tests, whether
indices try a test.

The past week saw the stock indices push again to new highs, continuing the
round of new highs from the previous Friday. Thursday stocks hit the near
term upside saturation point and stalled. That stall bled over into Friday.
It was a down and up and down and up session, however, and the market ended
on the upswing. That closed the indices positive, if just barely so in most
cases.

SP500 3.94, -0.17%
NASDAQ 23.68, 0.41%
DJ30 4.28, 0.02%
SP400 0.09%
RUTX 0.05%
SOX 0.57%

VOLUME: NYSE +6%, NASDAQ -3%. NASDAQ trade was lower but remained above
average as it did all week but Monday. Indeed, NASDAQ trade has scored
above average trade 11 of the last 14 sessions. As those were most all
upside, that shows buying. NYSE trade moved above average for the first
time in 13 sessions, and of course it was on expiration where there is
elevated trade. For NYSE this move remains rather exceptionally weak in its
price/volume action, particularly when you consider volume is just about at
the levels from the long 9 week lateral consolidation range. Not tons of
upside power.

A/D: NYSE -1.1:1, NASDAQ +1.2:1. Breadth remains quite tepid as each day
the move is led by a few stocks even if the action does rotate around the
market.


Interestingly, SOX, after lagging all week, took the point Friday and moved
to a new closing high. It led the initial move so it started testing while
the others played catch up. Then it shot higher Friday as stocks such as
SWKS surged in big new breakouts.

NASDAQ continued its breakneck (almost) rally, gapping lower but reversing
to a new high as it put in its eighth new closing high in nine sessions.

SP500, DJ30, and SP400 basically tread water, managing to recover off a
lower open to hold the Wednesday and Thursday close.

No power of note, but indeed a continued upside bias as investors bought a
weaker morning session. Perhaps expiration had something to do with that as
many had to get out of positions or roll them over after a big run into that
expiration, but once again sellers had a chance to sell and did not. Heck,
even Thursday saw the stock indices recover off the session lows to close
basically flat.

The internal indicators remain weak. MACD is trying to follow the stock
indices, but is still lagging considerably behind the index prices except
for NASDAQ where MACD broke out with NASDAQ and continues to break higher
with the prices.

Sentiment is also at a more extreme level with Bullish advisor sentiment
logging another week of bulls over 60%, now 5 of 6 weeks over 60%.

Okay, it is no secret the internal market indicators as well as sentiment
suggest a top to the rally. Indeed, on Thursday and Friday we heard more of
the TV commentators talking about a near term top.

The issue is how the many, many stocks moving higher in solid trends hold
their moves, AND whether new stocks come to the fore and add to the
leadership. Thus far the leaders have indeed showed up, moved up, and held
the moves. A stock such as SWKS broke out of a big base in mid-January,
moved laterally for five weeks, then surged higher anew on Friday. NTES
gapped out of a classic cup with handle base on Thursday. YNDX moved in a
tight consolidation at prior highs for 5 weeks then blasted off as well.
RS, X and others broke sharply higher. Many other stocks continue holding
gains and moving higher or are currently testing moves but still look great.

The point: the internals and sentiment continue pointing toward a pullback
in the market, but leading stocks keep finding a way to rally or hold their
gains and support while waiting for money to rotate back their way so they
can rally once more. As long as the market has plenty of leaders setting up
to move higher and moving higher, the internals and sentiment take a back
seat. They tell you to be alert to leaders breaking down, but the move can
continue for quite some time after the internals start suggesting trouble
ahead.

I will say it was harder to find plays in good position for upside moves
this weekend, and that speaks to the rally with many stocks either having
broken higher recently or are in continuing moves that are not good entry
points. Or they are testing and do not yet look ripe to make the new break
higher. That does suggest that the upside is getting extended AND raises
questions as to how much fuel is still out there to burn to drive the
upside. So, another reason to be aware that the market could put in a peak.

As for our positions, virtually all are either moving higher still or are in
very good tests of very good moves or are set up in very good patterns. It
could be the stocks in pullbacks just don't bounce this time due to the
market bids drying up for now. They will show that by breaking near support
and being unable to recover by the close. That would be a pretty solid
signal, combined with the internals and sentiment, that the rally had run
its course.

Thus, this week's action after the NYSE indices started to slow, will be
hugely instructive. Unless there is a violent break lower, you usually have
to see where the leaders testing support close. A reach lower has been
bought in this market, and many testing leaders are at the point where they
often show one more dip then a reversal back upside sets in. Again, that
makes this week very instructive as to the rally's continued energy.

We have some really interesting upside plays to start the shortened week,
but remember, it was harder to find them. Some of the current plays look
great, e.g. SLAB, and you definitely want to keep them in mind as they are
really solid leaders in solid shape to make new solid moves. Solid.

So, let's see how those plays pan out and whether the market looks ready for
a pullback or a continued move. We know a pullback will come, and the
internals suggest it is in the making and has been in the making. We have
some downside plays in oil and gas as well as insurance along with IP thrown
in. Most sectors and particularly the indices, however, are still in solid
uptrends and have not started building tops. Thus, playing them downside is
really just a guessing game of when they crack, and if they do, how far that
crack takes them. We will definitely make some downside plays when they
show up, just was we are doing now, but many have not set up downside
patterns yet. As the different groups do, we can put some of that money to
work downside as we have done.

Have a great weekend and market day off on Monday!


THE MARKET

MARKET STATS

DJ30
Stats: +4.28 points (+0.02%) to close at 20624.05

Nasdaq
Stats: +23.68 points (+0.41%) to close at 5838.58
Volume: 1.85B (-2.63%)

Up Volume: 1.17B (+327.99M)
Down Volume: 637.19M (-422.81M)

A/D and Hi/Lo: Advancers led 1.26 to 1
Previous Session: Decliners led 1.29 to 1

New Highs: 173 (-75)
New Lows: 24 (-1)

S&P
Stats: +3.94 points (+0.17%) to close at 2351.16
NYSE Volume: 900M (+5.5%)

A/D and Hi/Lo: Decliners led 1.16 to 1
Previous Session: Decliners led 1.36 to 1

New Highs: 123 (-78)
New Lows: 11 (-1)


SENTIMENT INDICATORS

VIX: 11.49; -0.27. This past week saw the situation where volatility rose
with market gains. That is always worth noting in your bearish signals log,
though VIX overall remains very low. At this juncture, upside VIX sessions
are more an indication that yes there can be a nearer term
pullback/correction. This is contrasted with the situation where VIX is
trending higher as the market trends higher. A steady uptrend in VIX
accompanying a steady uptrend in the market indices is an indication of a
longer term, serious market top setting in.
VXN: 12.07; -0.67
VXO: 11.27; +0.73

Put/Call Ratio (CBOE): 0.93; +0.04


Bulls and Bears: Bulls backed off the cycle high but still held over 60%.
Bears remain unconvinced, jumping back up to levels three weeks back.

Bulls: 61.8 versus 62.7

Bears: 17.6 versus 16.7

Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.





Bulls: 61.8 versus 62.7
62.7 versus 61.8 versus 58.2 versus 60.6 versus 58.6 versus 60.2 versus 59.8
versus 59.8 versus 59.6 versus 58.8 versus 56.3 versus 55.6 versus 51.0
versus 42.9 versus 41.7 versus 47.1 versus 42.9 versus 46.1 versus 46.7
versus 45.2 versus 44.6 versus 49.0 versus 52.5 versus 55.9 versus 56.7
versus 56.2 versus 54.3 versus 52.9% versus 53.9% versus 54.4% versus 52.5%
versus 47.1% versus 41.6% versus 47.5% versus 45.9% versus 47.3% versus
45.4% versus 35.4% versus 40.2 versus 39.2

Bears: 17.6 versus 16.7
16.7 versus 17.6 versus 17.5 versus 17.3 versus 18.3 versus 18.4 versus 19.6
versus 19.6 versus 19.2 versus 19.6 versus 22.3 versus 21.6 versus 23.5
versus 25.7 versus 24.3 versus 23.1 versus 23.8 versus 23.1 versus 22.8
versus 23.1 versus 24.3 versus 22.6 versus 22.8 versus 20.6 Versus 20.2
versus 20.0 versus 20.9% versus 21.2% versus 21.6% versus 23.3% versus 24.7%
versus 24.5% versus 23.8% versus 23.2% versus 23.5% versus 23.8% versus
23.7% versus 24.0% versus 21.7% versus 21.6% versus 21.7 versus 20.6% versus
21.7% versus 27.8% versus 27.8% versus 28.9% versus 27.8% versus 30.3%
versus 35.4%


OTHER MARKETS

Bonds (10 year): 2.42% versus 2.45%. Bonds rallied Thursday and Friday
after selling earlier on the Yellen congressional testimony. Still in the
more recent 7 week range as they try to continue a move off the lows, but
stuck at the 50 day EMA.

Historical: the last sub-2% rate was in November 2016 (1.867%). 2.45%
versus 2.50% versus 2.473% versus 2.43% versus 2.41% versus 2.398% versus
2.340% versus 2.393% versus 2.41% versus 2.48% versus 2.474% versus 2.477%
versus 2.44% versus 2.49% versus 2.48% versus 2.512% versus 2.52% versus
2.467% versus 2.40% versus 2.47% versus 2.468% versus 2.422% versus 2.372%
versus 2.393% versus 2.358% versus 2.365% versus 2.38% versus 2.962% versus
2.42% versus 2.357% versus 2.45% versus 2.448% versus 2.42% versus 2.48%
versus 2.51% versus 2.56% versus 2.54% versus 2.55% versus 2.54% versus
2.564% versus 2.544% versus 2.59% versus 2.59% versus 2.52% versus 2.473%


EUR/USD: 1.06108 versus 1.0665. Euro sold on the week but then bounced
Wednesday and Thursday to recover the 50 day MA's. Friday another weak
session coughed up those levels.

Historical: 1.06665 versus 1.06148 versus 1.05762 versus 1.06023 versus
1.06411 versus 1.06557 versus 1.06825 versus 1.06814 versus 1.07219 versus
1.07880 versus 1.07605 versus 1.07892 versus 1.0791 versus 1.07294 versus
1.06957 versus 1.06843 versus 1.0683 versus 1.0756 versus 1.07274 versus
1.0761 versus 1.07027 versus 1.06394 versus 1.06381 versus 1.07114 versus
1.06450 versus 1.0624 versus 1.05982 versus 1.0555 versus 1.0585 versus
1.05346 versus 105837 versus 1.0525 versus 1.03914 versus 1.05289 versus
1.05155 versus 1.04357 versus 1.04636 versus 1.0451 versus 1.04368 versus
1.04412 versus 1.0392


USD/JPY: 112.906 versus 113.356. Dollar first rallied into Yellen
testimony, but Wednesday tapped the 50 day SMA then faded into Friday. Still
working in the 7 week lateral range, trying to form a cup off the November
to December rally.

Historical: 113.356 versus 113.880 versus 114.306 versus 113.65 versus
113.856 versus 113.265 versus 113.401 versus 112.207 versus 112.332 versus
111.815 versus 112.567 versus 112.903 versus 112.68 versus 112.50 versus
114.493 versus 115.094 versus 114.469 versus 113.362 versus 113.850 versus
112.736 versus 114.39 versus 114.686 versus 114.538 versus 112.774 versus
114.473 versus 114.57 versus 114.70 versus 115.811 versus 116.023 versus
116.923 versus 115.93 versus 116.46 versus 117.983 versus 116.739 versus
116.456 versus 116.793 versus 117.41 versus 117.413 versus 117.32 versus
117.537 versus 117.544 versus 117.835 versus 117.453 versus 117.941 versus
118.257 versus 117.397 versus 115.038 versus 115.058 versus 115.20 versus
114.23 versus 113.325


Oil: 53.78, +0.03. And oil is still in the narrow 11 week lateral range
just over the 2016 highs.


Gold: 1239.10, -2.50. Testing the prior week's recovery highs off the
December low. Still trending higher off that low but bumping some resistance
and there is also the 200 day MA at 1265.


SUPPORT AND RESISTANCE

NASDAQ: Closed at 5838.58

Resistance:

Support:
5661 is the late January upper gap point
5601 is the January lower gap point
The 50 day EMA at 5580
The 50 day SMA at 5564
The 2016 trendline at 5559
The November prior all-time high at 5404
5340 is the September and October 2016 twin peaks
5287.61 is the September 2016 high
5271.36 is the August 2016 intraday prior all-time high
5231.94 is the 2015 all-time high
The 200 day SMA at 5220
5170 is the October intraday low.
5162 is the early November peak, 5176 is the December intraday peak
5100 from the April peak and early May peak
5042 is the March 2015 high
5008.57 is the early March 2015 post-bear market high
5007 is the 12/31 upper gap point from that big gap lower
4999 is the October upper gap point
4980 is the June 2016 peak
4969 is the April 2016 recovery high
4960 is the September 2015 intraday high, an important reversal point for
NASDAQ.
4920 is the lower gap point from mid-October 2015, the January 2016 lower
gap point
4916 is the mid-November 2015 low
4899 - 4902 from the September 2015 peak, July 2015 low
4894 is the September 2015 closing high


S&P 500: Closed at 2351.16

Resistance:

Support:
2301 is the late January 2017 high
The 2016 trendline at 2299
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The 50 day SMA at 2279
The 50 day EMA at 2276
The November 2016 all-time high at 2213.25
2194 is the August 2016 prior all-time high
2175 is the June 2016 high
The 200 day SMA at 2173
2135 is the May 2015 all-time high
2130 is the June 2015 peak
2126 was the April 2015 prior all-time high
2120 is the June 2016 peak
2119 is the September 2016 low; February 2015 intraday high
2116 is the November 2015 high
2111 is the April 2016 recovery high
2104 is the December 2015 high
2094 is the December 2014 high
2079 is the intraday all-time high from November 2014
2062 is the January 2015 lower high
2046 is the July 2015 closing low
2040 is the March 2015 closing low
2026 is the May 2016 low
2023 is the November 2015 low
2020 is the September 2015 intraday high
2011 is the September prior all-time high
1995 is the September 2015 recovery peak
1991 is the July 2014 high


Dow: Closed at 20,624.05

Resistance:

Support:
20,126 is the January 2017 intraday high
20,101 is the late January closing high.
19,994 - 19,999 (early January high, upper gap point from late January
The 50 day SMA at 19,971
The 50 day EMA at 19,885
19750 is the lows of the December/January range
The 200 day SMA at 18,673
18,669 is the August 2016 all-time high
18,595 is the July 2016 peak
18,351 is the prior all-time high from May 2015
18,288 from March 2015
18,262 is the upper gap point from the Monday gap lower.
18,247 is the August 2016 low
18,168 is the April 2016 recovery high
18,100 to 18,181: interim peaks in the December 2014 to July 2015 range
18,016 is the June 2016 peak
17,992 is the early September low
17,978 is the November 2015 peak
17,960 is the October intraday low
17,600 is the rough bottom of the April to June range.
17,351 is the September 2014 all-time high.


ECONOMIC CALENDAR

February 22 - Wednesday
MBA Mortgage Applica, 02/18 (7:00): -3.7% prior
Existing Home Sales, January (10:00): 5.57M expected, 5.49M prior
FOMC Minutes, 02/01 (14:00)

February 23 - Thursday
Initial Claims, 02/18 (8:30): 242K expected, 239K prior
Continuing Claims, 02/11 (8:30): 2076K prior
FHFA Housing Price I, December (9:00): 0.4% expected, 0.5% prior
Natural Gas Inventor, 02/18 (10:30): -114 bcf prior
Crude Inventories, 02/18 (11:00): +9.5M prior

February 24 - Friday
Michigan Sentiment -, February (10:00): 95.8 expected, 95.7 prior
New Home Sales, January (10:00): 566K expected, 536K prior

End part 1 of 3
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Sunday, February 12, 2017

The Daily, Part 1 of 3, 2-11-17

* * * *
2/11/2017 Investment House Daily
* * * *

Investment House Daily Subscribers:

MARKET ALERTS:

Targets hit: None issued
Entry alerts: LLNW
Trailing stops: None issued
Stop alerts: CERN; QLYS

The market alert service is a premium level service where we issue intraday
alerts relating to the general market conditions, when stocks hit action
points (buy, stop, target, etc.), and when we see other information
impacting the market or our stocks. To subscribe to the alert service you
can sign up at the following link:
http://www.investmenthouse.com/alertdaily.html

********************************************************************
The Market Video is DIVIDED into component parts: Market Overview, Economy,
Technical Summary, and the Next Session. Choose the segments you are
interested in without having to search a longer video. Click on the link to
the portion you wish to view.

TO VIEW THE MARKET OVERVIEW CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/mo/mo.mp4

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TO VIEW THE NEXT SESSION VIDEO CLICK THE FOLLOWING LINK:
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The REPORT SCHEDULE is as follows:

Market Summary Video, Plays and Play Videos, and Play Table with play
annotations will issue Wednesday, Weekend.

Monday a Market Summary video, new plays, play table annotations.

Tuesday and Thursday reports will contain the market summary, chart links to
view the index charts, and updated play table.

Access to all current videos will remain assessable each day using the play
links in the reports.

If any market circumstances arise where we see additional plays we want to
prepare for the next session, we will of course issue those plays regardless
of the day of the week.

MARKET SUMMARY

- The Art of the rally.
- Stock indices continue their rally to higher highs on another promise of
something good to come.
- Some leaders faded as the NYSE indices broke higher. Rotation or some
leaders falling out.
- Market still has macro negatives as it continues what has been a macro
uptrend.

The Art of the Phenomenal Market Rally.

Quite a ride. From -700 points on election night to new highs by December.
All on the hope that positive economic changes were coming, changes from the
tax, regulate, and strangulate policies of the prior 10 years. The new
version of hope and change that is actually what US hope and change has
always been: the chance for everyone to be their best and reach their
American dream.

But something happened in mid-December. The market took a breather of
course and waited for the new administration. It waited, waited, and
waited, looking for policies that would turn their hope into reality.
Meetings with companies brought promises of more full-time US jobs and more
investment. Still, those were just promises. What were the policies going
to be?

Inauguration came and the market jumped. Them dumped back into the range.
Tweets, executive orders some did not like, protests, obstruction claims.
The market was mired. The hope for something better was perhaps questioned
as republican senators who are the antithesis of what the founders wanted as
they server term after term after term (and thus have lost touch with the
reality of what it takes to start and grow a business in the US) vowed to
block any real change. After all, they had their power and they don't want
to empower anyone else, particularly those that cast the votes. The rally
stalled.

Then last Thursday a new mood, a new breakout, a new high for the stock
market. Not just NASDAQ and SOX who led their groups to very narrow new
highs, but the NYSE indices as well. Friday another gain, not as grand as
Thursday, but the new break higher continued.

SP500 8.23, 0.36%
NASDAQ 18.95, 0.33%
DJ30 96.97, 0.48%
SP400 0.55%
RUTX 0.75%
SOX -0.08%

The cause?

Earnings? No. While earnings are helping (or hurting) individual stocks,
the overall outlook has not helped markets. Specifically, the top line
results have fallen back into a slump after a Q3 'breakout.' With all the
hope, flagging sales is not a good affirmation of good times ahead.

No, this was, whether people like to admit it or not, Trump doing what Trump
does best: the art of getting what he wants. He staked a claim to the stock
market rally and he was right about that first move. After that, however,
the market started to look at not just what was possible, but what could be
accomplished. It balked. It needed some prodding. It got it.

Thursday in a meeting with airline executives, Trump noted that over the
next 2 to 3 weeks he would announce something 'phenomenal in terms of tax.'
How Robert Rubin-like; Rubin was a master at timing when the markets needed
a jolt of confidence. You don't get to be where Rubin, Trump, and others
are if you don't understand timing.

The result was a stock market breakout. The NYSE indices were lagging
NASDAQ and SOX, unable to break from their 9 week ranges. Worse, they HAD
tried a breakout and that was rejected. Then the promise of something
'phenomenal.' As I noted Thursday night, it reminded me of the movie '2010'
when Dave Bowman told Dr. Floyd (Roy Scheider) something was going to
happen. When Dr. Floyd asks 'what? What's going to happen?,' the
metamorphosed Dave Bowman responds, 'something wonderful.'


Dave Bowman: 'It's all very clear to me now . . .'

In the movie, Dr. Floyd believed what he saw and acted on the promise that
something wonderful was going to happen. Okay, he also had the threat that
he HAD to leave before that wonderful event occurred. Many CEO's have the
'threat' of possible repercussions if they invest outside the US.
Similarities.

Thursday and Friday the stock market acted on the renewed promise of
economic growth via a reformed tax code. As I noted Thursday, it will have
to be real reform along the lines of a Steve Forbes flat tax of 11%ish and
low to no corporate tax to be put in the 'phenomenal' category. The market
may have a lot of hope for change, but I am highly skeptical the plans will
be 'phenomenal.'

That does not, however, mean I don't participate. Heck, all along I have
talked of stock patterns that keep showing up despite the macro issues for
the market. If the patterns show the moves, you make your play. We have
not caught all of them but have some excellent positions in progress.

Those macro issues: Bullish sentiment hitting a level that foretells
corrections, low breadth, low volume, low MACD on the breaks higher. Even
so, the force is strong in this rally (another name for momentum) and it
continues higher.

More importantly, there are no sellers yet. They showed up two weeks ago
when SP500 gapped to a new high, breaking from its range, then gapped lower
right back into the range. That is pretty much the alpha and omega of the
sellers on this move. They will most surely show up, but they have not
shown up yet. The promise of change, phenomenal change, is hard to compete
with, particularly with an investor class that really wants some real
economic growth.

When the sellers do show up, however, they will likely be like a thief in
the night, that time when the sentiment is so bullish everyone is in and
there is no big money that still wants to put more into the rally. The Dow
showed a lot of churn as it worked through its lateral range; that suggests
stocks were being sold. A new break higher could bring that money right
back in, however. Thursday and Friday money was coming into stocks, but
volume was still tepid and breadth just decent. Perhaps that is enough, but
still keep an eye on the leaders.

That brings up a point. Chips have nicely led the market to new highs but
are now some are struggling. Perhaps it is just another round of rotation
to other groups; some certainly jumped last week such as metals and
restaurants, the latter rather despised until perhaps now. If the chips and
others such as FAANG, China, materials start to break, that would be a
problem.

THE MARKET

CHARTS

SP500: New high Thursday, again Friday, moving off the 10 day EMA and 2016
trendline. Volume, less than impressive. No days above average on the
break higher. Indeed, only 2 above average volume days in over a month. At
least it should show some good volume on the breaks higher. Not the case
Thursday and Friday.

DJ30: Thursday and Friday new highs same as SP500. At least Dow volume
moved above average Thursday, showing more buyers in the mix.

NASDAQ: Added two more record sessions to end the week. 10% above its 200
day SMA, and for NASDAQ that is no major extension.

SOX: As the other indices hit new highs, SOX tested the move, back to the
20 day EMA on the Friday low before rebounding to hold that near support.
Some chips started to struggle and SOX with them. Nothing major at this
point but a key group to watch.

SP400: Finally punched to a new high Friday. I suppose they are lagging,
though just a bit behind the large cap NYSE indices.

RUTX: No new high yet for the small caps, one of the most telling
indications as to just how economically beneficial any new policies may be.
Perhaps investors are not totally sure and are waiting to see the policies,
in the interim buying more 'brand name' stocks. Perhaps, and the small caps
are not that far behind the rest of the indices.


LEADERSHIP: Day's Winners (some were actually leaders).

Materials: enjoyed another upside session as money is put into
infrastructure related stocks even though infrastructure is NOT 'phenomenal'
tax policy. Indeed, it is not tax policy at all. It is spending. Big
difference. But I digress.

Metals: Closely related to materials and a solid late week break higher
from bases by the industrial metals. RS, X, SID. Not across the board but
some solid patterns break higher.

Chips: Faded at the end of the week as new sectors received money. Some
sold more than others, some did not sell. The main thing to watch is how
the group performs after this test. SLAB fell to the 10 day EMA in its
first down day in awhile. Same from MU. AMAT, AMD, AVGO are all fine.
TXN, LSCC broke lower on the week.

Restaurants: CAKE is rallying into earnings. BWLD had a wild week on
earnings but closed higher. PNRA surged on its earnings as well. JACK
gapped upside. Unfortunately for many of these, earnings are just around
the corner.

China: As with chips, some were off their feed late week, e.g. NTES, BABA,
but they held the 10 day EMA in a test. BIDU, ATHM, JD all worked well into
the weekend. Still a very solid leadership group.

FAANG: Not all perfect patterns, but up on the week and of course a big
contributor to NASDAQ's new highs.

Financial: Still no breakouts here. Down early week, recovered late week,
still in their ranges (BAC, JPM) or patterns (GS). Not yet contributing.

Industrial Equipment/Machinery: Not the best patterns in all cases but some
very nice late week moves, e.g. TEX, CAT, DE, EMR.


MARKET STATS

DJ30
Stats: +96.97 points (+0.48%) to close at 20269.37

Nasdaq
Stats: +18.95 points (+0.33%) to close at 5734.13
Volume: 1.8B (-5.26%)

Up Volume: 1.15B (-70M)
Down Volume: 687.6M (-17.78M)

A/D and Hi/Lo: Advancers led 2.04 to 1
Previous Session: Advancers led 2.61 to 1

New Highs: 225 (+32)
New Lows: 22 (-6)

S&P
Stats: +8.23 points (+0.36%) to close at 2316.1
NYSE Volume: 786.6M (-6.86%)

A/D and Hi/Lo: Advancers led 2.51 to 1
Previous Session: Advancers led 1.92 to 1

New Highs: 222 (+58)
New Lows: 5 (-4)


SENTIMENT INDICATORS

VIX: 10.85; -0.03
VXN: 12.31; -0.34
VXO: 10.41; +0.01

Put/Call Ratio (CBOE): 0.98; +0.05. Still very high put/call ratio as the
market breaks higher, perhaps closing downside positions versus buying
protection. A market breakout does that.


Bulls and Bears: Bulls hit another cycle high, making it 4 of 6 weeks above
60.0. Bears fell sharply.

Bulls: 62.7 versus 61.8

Bears: 16.7 versus 17.6

Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.





Bulls: 62.7 versus 61.8
61.8 versus 58.2 versus 60.6 versus 58.6 versus 60.2 versus 59.8 versus 59.8
versus 59.6 versus 58.8 versus 56.3 versus 55.6 versus 51.0 versus 42.9
versus 41.7 versus 47.1 versus 42.9 versus 46.1 versus 46.7 versus 45.2
versus 44.6 versus 49.0 versus 52.5 versus 55.9 versus 56.7 versus 56.2
versus 54.3 versus 52.9% versus 53.9% versus 54.4% versus 52.5% versus 47.1%
versus 41.6% versus 47.5% versus 45.9% versus 47.3% versus 45.4% versus
35.4% versus 40.2 versus 39.2

Bears: 16.7 versus 17.6
17.6 versus 17.5 versus 17.3 versus 18.3 versus 18.4 versus 19.6 versus 19.6
versus 19.2 versus 19.6 versus 22.3 versus 21.6 versus 23.5 versus 25.7
versus 24.3 versus 23.1 versus 23.8 versus 23.1 versus 22.8 versus 23.1
versus 24.3 versus 22.6 versus 22.8 versus 20.6 Versus 20.2 versus 20.0
versus 20.9% versus 21.2% versus 21.6% versus 23.3% versus 24.7% versus
24.5% versus 23.8% versus 23.2% versus 23.5% versus 23.8% versus 23.7%
versus 24.0% versus 21.7% versus 21.6% versus 21.7 versus 20.6% versus 21.7%
versus 27.8% versus 27.8% versus 28.9% versus 27.8% versus 30.3% versus
35.4%


OTHER MARKETS

Bonds (10 year): 2.398% versus 2.398%. Gapped upside Wednesday, faded
Thursday and Friday to test the last leg upside. Not a bad setup to continue
the nascent recovery off the December low.

Historical: the last sub-2% rate was in November 2015. 2.340% versus 2.393%
versus 2.41% versus 2.48% versus 2.474% versus 2.477% versus 2.44% versus
2.49% versus 2.48% versus 2.512% versus 2.52% versus 2.467% versus 2.40%
versus 2.47% versus 2.468% versus 2.422% versus 2.372% versus 2.393% versus
2.358% versus 2.365% versus 2.38% versus 2.962% versus 2.42% versus 2.357%
versus 2.45% versus 2.448% versus 2.42% versus 2.48% versus 2.51% versus
2.56% versus 2.54% versus 2.55% versus 2.54% versus 2.564% versus 2.544%
versus 2.59% versus 2.59% versus 2.52% versus 2.473% versus 2.475% versus
2.471% versus 2.40% versus 2.349% versus 2.39% versus 2.396% versus 2.394%
versus 2.454% versus 2.388% versus 2.30% versus 2.31%. versus 2.36% versus
2.355% versus 2.317% versus 2.30% versus 2.34% versus 2.297% versus 2.219%
versus 2.22% versus 2.23% versus 2.14% versus 2.077% versus 1.867% versus
1.83% versus 1.778%


EUR/USD: 1.06411 versus 1.06557. After the December through January euro
rally, the common currency faded back to the 50 day SMA on the week. Pretty
decent test of the move from the look of it.

Historical: 1.06557 versus 1.06825 versus 1.06814 versus 1.07219 versus
1.07880 versus 1.07605 versus 1.07892 versus 1.0791 versus 1.07294 versus
1.06957 versus 1.06843 versus 1.0683 versus 1.0756 versus 1.07274 versus
1.0761 versus 1.07027 versus 1.06394 versus 1.06381 versus 1.07114 versus
1.06450 versus 1.0624 versus 1.05982 versus 1.0555 versus 1.0585 versus
1.05346 versus 105837 versus 1.0525 versus 1.03914 versus 1.05289 versus
1.05155 versus 1.04357 versus 1.04636 versus 1.0451 versus 1.04368 versus
1.04412 versus 1.0392 versus 1.0407 versus 1.0459 versus 1.0415 versus
1.05094 versus 1.0636 versus 1.06326 versus 1.05586 versus 1.06140 versus
1.07745 versus 1.07194 versus 1.07614 versus 1.06638 versus 1.06631 versus
1.0601 versus 1.0649 versus 1.05699 versus 1.066 versus 1.05910


USD/JPY: 113.265 versus 113.401. Nice move Thursday, off Friday, still in
the 8 week pullback from the election through December rally.

Historical: 113.401 versus 112.207 versus 112.332 versus 111.815 versus
112.567 versus 112.903 versus 112.68 versus 112.50 versus 114.493 versus
115.094 versus 114.469 versus 113.362 versus 113.850 versus 112.736 versus
114.39 versus 114.686 versus 114.538 versus 112.774 versus 114.473 versus
114.57 versus 114.70 versus 115.811 versus 116.023 versus 116.923 versus
115.93 versus 116.46 versus 117.983 versus 116.739 versus 116.456 versus
116.793 versus 117.41 versus 117.413 versus 117.32 versus 117.537 versus
117.544 versus 117.835 versus 117.453 versus 117.941 versus 118.257 versus
117.397 versus 115.038 versus 115.058 versus 115.20 versus 114.23 versus
113.325 versus 113.993 versus 113.601 versus 113.52 versus 113.945 versus
114.19 versus 112.685 versus 112.44 versus 111.835 versus 113.14 versus
112.445 versus 111.129 versus 110.809


Oil: 53.86, +0.86. Oil is back to the top of its range as reports are that
OPEC is holding to its production quoatas. As noted before, someone check
whether hell froze over. Up off the 50 day MA's to the top of the 9 week
range and resistance at 54.


Gold: 1235.90, -0.90. Solid week, faded some Friday. Still looks solid in
the second leg of the rally off the mid-December low.


MONDAY

The market broke higher to new highs once more. The breakout that was
rejected is now a new breakout. Will there be a second rejection? Depends
on how the leaders hold up.

Semiconductors are in a soft spot, but that is presenting upside opportunity
in some good names. We are looking at some of those this weekend and will
look at more as next week progresses. There are also some good downside
setups that we are looking at as well as they have set up even with a market
breakout.

While there are macro challenges to the rally as discussed earlier, there is
also a dearth of sellers to capitalize on them. Thus the upside bias
continues holding in spite of the challenges.


Have a great weekend!




SUPPORT AND RESISTANCE

NASDAQ: Closed at 5734.13

Resistance:

Support:
5601 is the January lower gap point
The 2016 trendline at 5542
The 50 day EMA at 5530
The 50 day SMA at 5513
The November prior all-time high at 5404
5340 is the September and October 2016 twin peaks
5287.61 is the September 2016 high
5271.36 is the August 2016 intraday prior all-time high
5231.94 is the 2015 all-time high
The 200 day SMA at 5195
5170 is the October intraday low.
5162 is the early November peak, 5176 is the December intraday peak
5100 from the April peak and early May peak
5042 is the March 2015 high
5008.57 is the early March 2015 post-bear market high
5007 is the 12/31 upper gap point from that big gap lower
4999 is the October upper gap point
4980 is the June 2016 peak
4969 is the April 2016 recovery high
4960 is the September 2015 intraday high, an important reversal point for
NASDAQ.
4920 is the lower gap point from mid-October 2015, the January 2016 lower
gap point
4916 is the mid-November 2015 low
4899 - 4902 from the September 2015 peak, July 2015 low
4894 is the September 2015 closing high


S&P 500: Closed at 2316.10

Resistance:

Support:
2301 is the late January 2017 high
The 2016 trendline at 2291
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The 50 day SMA at 2265
The 50 day EMA at 2261
The November 2016 all-time high at 2213.25
2194 is the August 2016 prior all-time high
2175 is the June 2016 high
The 200 day SMA at 2166
2135 is the May 2015 all-time high
2130 is the June 2015 peak
2126 was the April 2015 prior all-time high
2120 is the June 2016 peak
2119 is the September 2016 low; February 2015 intraday high
2116 is the November 2015 high
2111 is the April 2016 recovery high
2104 is the December 2015 high
2094 is the December 2014 high
2079 is the intraday all-time high from November 2014
2062 is the January 2015 lower high
2046 is the July 2015 closing low
2040 is the March 2015 closing low
2026 is the May 2016 low
2023 is the November 2015 low
2020 is the September 2015 intraday high
2011 is the September prior all-time high
1995 is the September 2015 recovery peak
1991 is the July 2014 high


Dow: Closed at 20,269.37

Resistance:

Support:
20,126 is the January 2017 high
19,994 - 19,999 (early January high, upper gap point from late January
The 50 day SMA at 19,835
19750 is the lows of the December/January range
The 50 day EMA at 19,735
18,669 is the August 2016 all-time high
18,595 is the July 2016 peak
The 200 day SMA at 18,604
18,351 is the prior all-time high from May 2015
18,288 from March 2015
18,262 is the upper gap point from the Monday gap lower.
18,247 is the August 2016 low
18,168 is the April 2016 recovery high
18,100 to 18,181: interim peaks in the December 2014 to July 2015 range
18,016 is the June 2016 peak
17,992 is the early September low
17,978 is the November 2015 peak
17,960 is the October intraday low
17,600 is the rough bottom of the April to June range.
17,351 is the September 2014 all-time high.


ECONOMIC CALENDAR

February 14 - Tuesday
PPI, January (8:30): 0.3% expected, 0.3% prior
Core PPI, January (8:30): 0.2% expected, 0.2% prior

February 15 - Wednesday
MBA Mortgage Applica, 02/11 (7:00): 2.3% prior
Core CPI, January (8:30): 0.2% expected, 0.2% prior
CPI, January (8:30): 0.3% expected, 0.3% prior
Empire Manufacturing, February (8:30): 7.0 expected, 6.5 prior
Retail Sales, January (8:30): 0.1% expected, 0.6% prior
Retail Sales ex-auto, January (8:30): 0.4% expected, 0.2% prior
Capacity Utilization, January (9:15): 75.5% expected, 75.5% prior
Industrial Productio, January (9:15): 0.0% expected, 0.8% prior
Business Inventories, December (10:00): 0.4% expected, 0.7% prior
NAHB Housing Market , February (10:00): 68 expected, 67 prior
Crude Inventories, 02/11 (10:30): +13.8M prior
Net Long-Term TIC Fl, December (16:00): $30.8B prior

February 16 - Thursday
Housing Starts, January (8:30): 1220K expected, 1226K prior
Building Permits, January (8:30): 1230K expected, 1210K prior
Initial Claims, 02/11 (8:30): 245K expected, 234K prior
Continuing Claims, 02/11 (8:30): 2078K prior
Philadelphia Fed, February (8:30): 17.5 expected, 23.6 prior
Natural Gas Inventor, 02/11 (10:30): -152 bcf prior

February 17 - Friday
Leading Indicators, January (10:00): 0.5% expected, 0.5% prior

End part 1 of 3
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Saturday, February 04, 2017

The Daily, Part 1 of 3, 2-4-17

* * * *
2/4/2017 Investment House Daily
* * * *

Investment House Daily Subscribers:

MARKET ALERTS:

Targets hit: TSEM
Entry alerts: None issued
Trailing stops: None issued
Stop alerts: None issued

The market alert service is a premium level service where we issue intraday
alerts relating to the general market conditions, when stocks hit action
points (buy, stop, target, etc.), and when we see other information
impacting the market or our stocks. To subscribe to the alert service you
can sign up at the following link:
http://www.investmenthouse.com/alertdaily.html

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The Market Video is DIVIDED into component parts: Market Overview, Economy,
Technical Summary, and the Next Session. Choose the segments you are
interested in without having to search a longer video. Click on the link to
the portion you wish to view.

TO VIEW THE MARKET OVERVIEW CLICK THE FOLLOWING LINK:
Flash: http://investmenthouse1.com/ihmedia/f/mo/mo.mp4

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The REPORT SCHEDULE is as follows:

Market Summary Video, Plays and Play Videos, and Play Table with play
annotations will issue Wednesday, Weekend.

Monday a Market Summary video, new plays, play table annotations.

Tuesday and Thursday reports will contain the market summary, chart links to
view the index charts, and updated play table.

Access to all current videos will remain assessable each day using the play
links in the reports.

If any market circumstances arise where we see additional plays we want to
prepare for the next session, we will of course issue those plays regardless
of the day of the week.

MARKET SUMMARY

- Market overcomes the gap lower as NASDAQ, SOX push to new highs.
- A few more negatives face stocks, but the upside bias is still winning
out.
- Not just typical stories are impacting stock movement, at least on a
temporary basis.
- Still plenty of good patterns. Plenty.
- Jobs Report shows a jump in full-time in January, anticipating ACA repeal.
- Earnings revert to a familiar pattern: lots of top line misses. Lots.
- Every day is an adventure as to what is coming from the administration and
how the market will take it. Even so, the market found support and moved
back up.

The past two weeks saw the stock indices break higher out of 6 week ranges
to new highs, give that move back 3 sessions later, then rally back to try
for new highs again. A breakout, a breakout rejection, then new bids.
Volume sluggish at best, unusual for a new year. Bullish advisor sentiment
hit a cycle high at 61.8%, making it 3 of 5 weeks over 60%. Historically,
that has marked a rally top and led to deeper corrections.

SP500 16.57, 0.73%
NASDAQ 30.57, 0.54%
DJ30 186.55, 0.94%
SP400 1.29%
RUTX 1.50%
SOX 0.52%

VOLUME: NYSE -3.5%, NASDAQ -9%. Okay it was Friday so if you are looking
for excuses you can use that one. Otherwise, it was another upside session
on lower volume.

A/D: NYSE 3.7:1, NASDAQ 2.8:1. Small and midcaps kicked back in and that
really helped to post some decent breadth for the first time in quite a
while.

Given the more negative issues arising, this weekend I expected to see
several downside setups in our review of stocks and sectors. Instead, I see
many upside setups for stocks that either made good moves and are ready to
resume, or are ready for new breaks. Oil has come back around likely thanks
to a weaker dollar. Semiconductors remain strong though many are not at new
buy points. Biotechs continue to set up patterns, particularly smaller
priced issues. Some areas of metals, and not just precious metals, show good
patterns. China stocks, transports -- large numbers of sectors are working
just fine.

So, was it just a momentary letdown with what the Trump administration was
accomplishing? Was there a sudden concern after the immigration EO that
Trump's growth agenda might be threatened, not so much by the democrats, but
by the real life Dumb and Dumber Lindsey Graham and John McCain?

Graham is still miffed his ideas were relegated to the sub-ticket in the
republican debates (and that should tell him where he stands with most of
America) while McCain's rants reveal he is still bitter about his 2008
defeat as he plays out the twilight of his career as a tin-plated dictator
with delusions of God-hood (that is a line from a Star Trek episode, 'The
Trouble with Tribbles'). Seriously, when your only response to economic,
social, foreign or any issues is 1) get the money out of politics (of which,
by the way, McCain has HUGE amounts in his war chest), and 2) massively
build up the military as some form of economic growth strategy
(demonstrating his economic wisdom could fit on a quarter of a 3 x 5 index
card), you are going to lose.

Okay, a bit of a digression, but it had to be said.

Whatever it was, the market went from breakout to rejected breakout, to
'well, maybe we should try again.' I don't like to see things in the
shadows that are not there. If a chart doesn't say 'buy' or 'sell,' then
you have to see what the stock is going to do. Don't try to divine meaning
beyond that because if the chart isn't saying it, then the decision is not
made. In that instance, if anything, look at the trend as the possible
overriding factor that could influence the way the stock breaks.

Right now the market is trending higher. Right now the NYSE indices are
again stuck in their range, having failed a breakout but also not collapsing
through the bottom of their late 2016 ranges. SOX and NASDAQ broke to
higher highs this past week, still clearly trending upside and thus leading
the market in terms of the upside.

With that, and not looking for things in the shadows, you would play stocks
in those indices upside and be ready to play the others as their components
follow their lead. We have positions in both. Basically we have positions
in the good sectors that are moving up, and we are looking at positions in
other areas in the event they make the move as well. Following leadership
tends to put you in that situation.

Thus the outlook is all roses given NASDAQ and SOX are trending higher and
the NYSE indices have not broken their ranges, right? Well, maybe not
roses, but they are trending higher for now. Not looking at shadows mind
you, but looking at facts, there is the 60+% sentiment reading in 3 of the
past 5 weeks, a reliable indicator of a market top forming. As for timing,
not so reliable. It is there, however, it is a fact, and it has
ramifications. As noted last week, it is a factor to put into the equation,
a factor that worsens the risk/reward probabilities a bit. It does not
trump good patterns making good moves, but it CAN and SHOULD factor into
your plan for a position and what size of move you anticipate.

So this coming week we have a lot of upside plays that have the potential to
make good money without needing a two month move to do so. The market is
not showing it is rolling over but it has shown signs the buyers are not as
lockstep solid as they were. After all, a breakout was rejected, and that
is one of the strongest market signals. Nonetheless, the stock indices did
not roll over and they are back at it again. Coupled with seeing a lot of
stocks in or setting up good potential entries, you look at the plays in
line with that situation.

When entering, however, set your parameters with the overlay of the negative
factors and don't assume that just because the trend is in place it must
remain in place. They say what does not kill you (or a trend) makes you
stronger. The thing is, you have to go through the rougher patches to find
out if you are going to survive. The key to being in the market at these
times is not assuming survival and thus entering at good entries and taking
gain at logical points, then letting the rest of the position work as long
as the play and the market behave.

NEWS/ECONOMY

Jobs and earnings dominated the news. Earnings, as noted earlier in the
week, are reverting back to the top line/revenues misses after a one-quarter
improvement in Q3. I heard one of the CNBC baristas parrot what her fund
manager sources (talking their book of course) regarding how the earnings
drought is over. Really? It looks more as if Q3 was an aberration, not a
reversion to the mean. Once again the market has sadly put forth an
impressive string of companies sporting top line misses:

Revenue misses: AMZN; GPRO; CLX; AN; HSY; DECK; FEYE; HBI; MRK; AZN; MET;
EL; SYMC; UA; HOG; XRX; UPS; HON; GD; CG; SBUX; GOOG; F; QCOM; MAT; CAT;
BIIB; TXT; COF; JNJ; DD; HAL; GE; C; BAC; BLK; WFC.

Do you see the pattern? Right, there is NO pattern. Companies from all
sectors are missing. A veritable who's who of corporate giants once again
suffering revenues declines.


Jobs Report

Non-Farm Jobs: 227K versus 235k expected versus 154K prior (from 156K)

Unemployment: 4.8%

Average Hourly Wages: 0.1% vs 0.3% expected versus 0.2% December (from
0.4%).
Yearly wages: +2.5%

Workweek: 34.4 hours vs 34.3 expected versus 34.4 prior (from 34.3)

Participation Rate: 62.9% versus 62.7%. Quite a jump.

Not in workforce: 94.3M versus 95.1M December. Down by 736,000.

Entering workforce: +580K

Part-time jobs: -490K

Full-time jobs: +457K


The January jobs report received some gushingly good reviews by some
commentators while others were more sanguine. Both are wrong.

It's 227K jobs people; it is sooooo mediocre. But, as I wrote years ago, we
were going to 'dumb down' our standards for what is good and not. Years of
barely mediocre results resulting from the structural changes in our economy
and jobs market, thanks to regulation and taxes, put governors on our
economic output. Remember when 500K was truly a great number and 300K was
decent? Do you? Many do not and it is a sad testament to how we have
fallen. Is it any wonder that the campaign slogan 'Make America Great Again'
caught on with millions of Americans who remember what it was like when
American economic activity was great?

Wages: Many focused on the wage growth in December as a great signal of
recovery. Well, that growth was cut in half with revisions. Even so, at
the time I pointed out that the wage growth was skewed to the very top, the
supervisory employees (and that does include the CEO's, CIO's, CFO's, etc.)
and not toward the non-supervisory employees. Given the non-supervisory
employees make up 85+% of the workforce, that makes a difference in the
outlook on the economy and the ability to participate in it.

The January wages disappointed but it was more than the financial stations
report.

Non-supervisory wage growth, January: 0.04%

Average weekly earnings: -1.9%, the worst reading in a year.

Minimum wage: These paltry wage gains, indeed wage losses on a weekly
basis, occurred even as several more states implemented minimum wage
standards for 2017. That tells you right there that the wage gains were not
in the lower end of the spectrum: even as wages went up a mandated rate in
some states, overall wages fell at the low end. Did anyone see the new San
Francisco (first in Hong Kong) automated coffee drink barista? 2 cups a
minute to customers with no employees. Maybe those 10,000 refugees
Starbucks talked about are going to clean up after the automated coffee
barista is done for the day? Heck, they probably even have automated
cleaners; the machine barista is self-cleaning I hear.

I find it fascinating that full-time jobs surged and part-time purged in
January. This is the market anticipating an ACA repeal retroactive to the
first of the year. It is a case in point that tells you the markets,
employment markets as well as financial, are hearing what the Trump
administration is saying and ARE taking it at its word. With the ACA and
its 29-hour death threshold gone, companies will like to hire full-time
again. Fewer workers, less repeated training of employees due to higher
turnover at lower wage jobs, higher wages.

I believe the sharp 400K drop in ACA enrollees to start 2017 demonstrates
this mindset as well: people know the ACA will be repealed and thus they are
not buying the insurance they do not want and cannot afford.

Again, it is fascinating how the economic micro-planners think they can
dictate what must be done and think they have it all figured out just to see
how when you squeeze one side of a balloon the other pops out. Fortunately,
it does not look as if they squeezed so hard the balloon popped, but we are
not out of the woods yet, not by a long shot.


MARKET

After the breakout to new highs was rejected (at least for all but RUTX),
the indices held in their ranges and rallied right back up. SOX and NASDAQ
punched in at new highs while the other indices look as if they want to head
that way. Talk about a continuing upside bias, that is it: a rejection of
the rejection so to speak.

CHARTS

NASDAQ: After gapping lower Monday from the breakout gap, NASDAQ caught
itself, gapped higher Wednesday and finished out the week with a new
all-time closing high. It is just below the intraday high from late
January, but MACD broke higher on that high and volume was not bad at all on
the Wednesday upside break.

SOX: After an early week 10 day EMA test, SOX climbed back up and moved to
a new recovery high Friday, gapping to a doji. The chips continue leading
even if they move through a rotation inside the sector.

SP500, DJ30: The same action, gapping lower form the new high, holding in
the prior 6 week range, recovering Friday back near the top of the range.
SP500 gapped back over its 2016 trenldine Friday and both indices are not
just below the prior week's all-time high. They came right back from having
the breakout rejected, in kind of a rejection of the rejections.

SP400, RUTX: Both of these smaller cap indices tested at or near the lows
of the 6-week range early week, then stumbled higher. Friday they posted
nice upside gaps and are set to challenge the recent highs.


LEADERSHIP

Chips: New high on SOX and of course strong moves in the chips. NVDA, MU,
TSEM strong all week along with QRVO, AVGO, SLAB. More look interesting
such as AMBA, ENPH.

FAANG: FB trying to hold at the 10 day EMA as it rallied over the October
high on its earnings but reversed sharply. As with AMZN, the possibility of
a double top. AMZN gapped lower on earnings after testing the October high,
possibly a double top. At a minimum these are worth watching. AAPL holding
the Wednesday earnings gap. NFLX tested on the week, holding the 10 day EMA
and still trending. GOOG gapped up Friday, but that after gapping down
Monday and dropping to the 50 day MA's. These all deserve watching.

Biotech: Some interesting smaller patterns: INFI, CNAT, CRMD, OREX.

Oil: With the dollar falling they suddenly look better, again. AXAS, CRK,
UNT, SPN, NE.

China: Still not bad. SOHU setting up. ATHM continues climbing up the 10
day EMA. Ditto NTES. BABA has a nice pennant.

Materials/Construction: Still looking good. CX working on a 2 week pennant
over the 10 day EMA. MDR posted a good move on the week.

Financial: Came right back to life on the Trump EO dropping the Obama EO
creating a fiduciary duty between investment advisors and clients. Frankly,
I don't really have a problem with a financial advisor having a fiduciary
relationship with a client. What this gets to is not allowing the advisor
to take positions on the opposite side of a client. An advisor should not
be a market maker or something of that sort; that creates conflicts of
interest. If you want to advise people and get your certification, you want
a level of trust. 'Trust me' carries more weight if you know your advisor is
not taking a position the opposite of yours for whatever reason. But, I
digress. GS jumped higher (of course after I killed the play), C looks to
have bounced off a double bottom of sorts, BAC is approaching the top of the
range. QIWI is in good shape to break higher.

Metals: Precious metals are still looking good, e.g. HMY. Other metals as
well, e.g. MUX, X.


MARKET STATS

DJ30
Stats: +186.55 points (+0.94%) to close at 20071.46

Nasdaq
Stats: +30.57 points (+0.54%) to close at 5666.77
Volume: 1.8B (-9.04%)

Up Volume: 1.24B (+246.02M)
Down Volume: 517.44M (-522.56M)

A/D and Hi/Lo: Advancers led 2.77 to 1
Previous Session: Decliners led 1.09 to 1

New Highs: 181 (+81)
New Lows: 33 (+9)

S&P
Stats: +16.57 points (+0.73%) to close at 2297.42
NYSE Volume: 850.5M (-3.35%)

A/D and Hi/Lo: Advancers led 3.68 to 1
Previous Session: Advancers led 1.23 to 1

New Highs: 186 (+75)
New Lows: 17 (-4)


SENTIMENT INDICATORS

VIX: 10.97; -0.96
VXN: 12.78; -0.85
VXO: 10.14; -0.78

Put/Call Ratio (CBOE): 0.76; -0.1


Bulls and Bears: Bulls made it 3 of 5 weeks over 60, this time hitting
61.8, a new high for this move. Starting to pile up the more extreme level.

Bulls: 61.8 versus 58.2

Bears: 17.6 versus 17.5

Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.




Bulls: 61.8 versus 58.2
58.2 versus 60.6 versus 58.6 versus 60.2 versus 59.8 versus 59.8 versus 59.6
versus 58.8 versus 56.3 versus 55.6 versus 51.0 versus 42.9 versus 41.7
versus 47.1 versus 42.9 versus 46.1 versus 46.7 versus 45.2 versus 44.6
versus 49.0 versus 52.5 versus 55.9 versus 56.7 versus 56.2 versus 54.3
versus 52.9% versus 53.9% versus 54.4% versus 52.5% versus 47.1% versus
41.6% versus 47.5% versus 45.9% versus 47.3% versus 45.4% versus 35.4%
versus 40.2 versus 39.2

Bears: 17.6 versus 17.5
17.5 versus 17.3 versus 18.3 versus 18.4 versus 19.6 versus 19.6 versus 19.2
versus 19.6 versus 22.3 versus 21.6 versus 23.5 versus 25.7 versus 24.3
versus 23.1 versus 23.8 versus 23.1 versus 22.8 versus 23.1 versus 24.3
versus 22.6 versus 22.8 versus 20.6 Versus 20.2 versus 20.0 versus 20.9%
versus 21.2% versus 21.6% versus 23.3% versus 24.7% versus 24.5% versus
23.8% versus 23.2% versus 23.5% versus 23.8% versus 23.7% versus 24.0%
versus 21.7% versus 21.6% versus 21.7 versus 20.6% versus 21.7% versus 27.8%
versus 27.8% versus 28.9% versus 27.8% versus 30.3% versus 35.4%


OTHER MARKETS

Bonds (10 year): 2.48% versus 2.474%

Historical: 2.474% versus 2.477% versus 2.44% versus 2.49% versus 2.48%
versus 2.512% versus 2.52% versus 2.467% versus 2.40% versus 2.47% versus
2.468% versus 2.422% versus 2.372% versus 2.393% versus 2.358% versus 2.365%
versus 2.38% versus 2.962% versus 2.42% versus 2.357% versus 2.45% versus
2.448% versus 2.42% versus 2.48% versus 2.51% versus 2.56% versus 2.54%
versus 2.55% versus 2.54% versus 2.564% versus 2.544% versus 2.59% versus
2.59% versus 2.52% versus 2.473% versus 2.475% versus 2.471% versus 2.40%
versus 2.349% versus 2.39% versus 2.396% versus 2.394% versus 2.454% versus
2.388% versus 2.30% versus 2.31%. versus 2.36% versus 2.355% versus 2.317%
versus 2.30% versus 2.34% versus 2.297% versus 2.219% versus 2.22% versus
2.23% versus 2.14% versus 2.077% versus 1.867% versus 1.83% versus 1.778%


EUR/USD: 1.07880 versus 1.07605. Euro continues rising.

Historical: 1.07605 versus 1.07892 versus 1.0791 versus 1.07294 versus
1.06957 versus 1.06843 versus 1.0683 versus 1.0756 versus 1.07274 versus
1.0761 versus 1.07027 versus 1.06394 versus 1.06381 versus 1.07114 versus
1.06450 versus 1.0624 versus 1.05982 versus 1.0555 versus 1.0585 versus
1.05346 versus 105837 versus 1.0525 versus 1.03914 versus 1.05289 versus
1.05155 versus 1.04357 versus 1.04636 versus 1.0451 versus 1.04368 versus
1.04412 versus 1.0392 versus 1.0407 versus 1.0459 versus 1.0415 versus
1.05094 versus 1.0636 versus 1.06326 versus 1.05586 versus 1.06140 versus
1.07745 versus 1.07194 versus 1.07614 versus 1.06638 versus 1.06631 versus
1.0601 versus 1.0649 versus 1.05699 versus 1.066 versus 1.05910


USD/JPY: 112.567 versus 112.903. Dollar struggling to hang on at the recent
lows.

Historical: 112.903 versus 112.68 versus 112.50 versus 114.493 versus
115.094 versus 114.469 versus 113.362 versus 113.850 versus 112.736 versus
114.39 versus 114.686 versus 114.538 versus 112.774 versus 114.473 versus
114.57 versus 114.70 versus 115.811 versus 116.023 versus 116.923 versus
115.93 versus 116.46 versus 117.983 versus 116.739 versus 116.456 versus
116.793 versus 117.41 versus 117.413 versus 117.32 versus 117.537 versus
117.544 versus 117.835 versus 117.453 versus 117.941 versus 118.257 versus
117.397 versus 115.038 versus 115.058 versus 115.20 versus 114.23 versus
113.325 versus 113.993 versus 113.601 versus 113.52 versus 113.945 versus
114.19 versus 112.685 versus 112.44 versus 111.835 versus 113.14 versus
112.445 versus 111.129 versus 110.809


Oil: 53.83, +0.29. Still bumping against 54.00 resistance.


Gold: 1220.80, +1.40. Good week, clearing the January recovery peaks and
double top.


MONDAY

NYSE indices are still in their ranges, unable to hold a breakout but the
sellers unable to break them down from their range. Thus they are at the
top of the range and trying to follow NASDAQ and SOX to higher highs. The
upside bias has not broken; faltered a bit, but it keeps recovering.
Immigration was an issue for some reason, and the market healed itself,
focusing on Trump getting rid of the fiduciary EO. Leaked, and I hear
exaggerated, versions of telephone calls with the Australian PM and Mexican
President worry some and cause curmudgeon McCain to make his own calls of
assurance to world leaders.

What will be the next problem and will it be a real problem? Immigration
caused the rending of garments on the east and west coast but the rest of
the US asked 'isn't that what he said he was going to do? Have not other
Presidents done the same thing? Is this not expressly a power Congress
granted to the Executive?' Then they went back to work to pay for all of
the benefits many of those protesting receive.

The point: The new administration is proceeding at a rapid clip, the
democrats were caught off guard with the loss and are scrambling to oppose
what they can. Having no plan in place they are getting help from some of
the less savory areas and the result is property destruction, limitation of
free speech, and in some cases some serious injuries to some people who just
happened to try and speak up for themselves. Not a good situation for
either side to be in.

Thus the market is still somewhat susceptible to the story of the day as we
saw the past couple of weeks. Ironically, earnings are not having that much
impact out of the individual stock involved. Outside influences are
exerting more near term pressure on stocks and causing selling then buying,
or at least a cessation of selling.

That does show the upside bias continues and thus we have quite a few upside
plays this weekend. We tried to filter them to the best ones with regard to
sector, pattern, earnings, but there are a LOT of stocks that have set up
where we like the patterns. That suggests (just suggests) that the market
is ready to make a new break higher, continuing the breakout that tried but
failed two Wednesdays back.

Again, that could be the last hurrah for the rally given the sentiment
readings, but sentiment is not a timing device, just a warning flag. If the
market wants to put in another run it will do so. It is up to us to
participate, and then watch to see if there is anything that truncates that
move prematurely given the more extreme bullish sentiment.

Have a great weekend.


SUPPORT AND RESISTANCE

NASDAQ: Closed at 5666.77

Resistance:

Support:
5601 is the January lower gap point
The 2016 trendline at 5516
The 50 day EMA at 5493
The 50 day SMA at 5482
The November prior all-time high at 5404
5340 is the September and October 2016 twin peaks
5287.61 is the September 2016 high
5271.36 is the August 2016 intraday prior all-time high
5231.94 is the 2015 all-time high
The 200 day SMA at 5175
5170 is the October intraday low.
5162 is the early November peak, 5176 is the December intraday peak
5100 from the April peak and early May peak
5042 is the March 2015 high
5008.57 is the early March 2015 post-bear market high
5007 is the 12/31 upper gap point from that big gap lower
4999 is the October upper gap point
4980 is the June 2016 peak
4969 is the April 2016 recovery high
4960 is the September 2015 intraday high, an important reversal point for
NASDAQ.
4920 is the lower gap point from mid-October 2015, the January 2016 lower
gap point
4916 is the mid-November 2015 low
4899 - 4902 from the September 2015 peak, July 2015 low
4894 is the September 2015 closing high


S&P 500: Closed at 2297.42

Resistance:
2301 is the late January 2017 high

Support:
The 2016 trendline at 2283
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The 50 day SMA at 2255
The 50 day EMA at 2252
The November 2016 all-time high at 2213.25
2194 is the August 2016 prior all-time high
2175 is the June 2016 high
The 200 day SMA at 2161
2135 is the May 2015 all-time high
2130 is the June 2015 peak
2126 was the April 2015 prior all-time high
2120 is the June 2016 peak
2119 is the September 2016 low; February 2015 intraday high
2116 is the November 2015 high
2111 is the April 2016 recovery high
2104 is the December 2015 high
2094 is the December 2014 high
2079 is the intraday all-time high from November 2014
2062 is the January 2015 lower high
2046 is the July 2015 closing low
2040 is the March 2015 closing low
2026 is the May 2016 low
2023 is the November 2015 low
2020 is the September 2015 intraday high
2011 is the September prior all-time high
1995 is the September 2015 recovery peak
1991 is the July 2014 high


Dow: Closed at 20,071.46

Resistance:
20,126 is the January 2017 high

Support:
19,994 - 19,999 (early January high, upper gap point from late January
19750 is the lows of the December/January range
The 50 day SMA at 19,731
The 50 day EMA at 19,647
18,669 is the August 2016 all-time high
18,595 is the July 2016 peak
The 200 day SMA at 18,550
18,351 is the prior all-time high from May 2015
18,288 from March 2015
18,262 is the upper gap point from the Monday gap lower.
18,247 is the August 2016 low
18,168 is the April 2016 recovery high
18,100 to 18,181: interim peaks in the December 2014 to July 2015 range
18,016 is the June 2016 peak
17,992 is the early September low
17,978 is the November 2015 peak
17,960 is the October intraday low
17,600 is the rough bottom of the April to June range.
17,351 is the September 2014 all-time high.


ECONOMIC CALENDAR

February 3 - Friday
Nonfarm Payrolls, January (8:30): 227K actual versus 170K expected, 157K
prior (revised from 156K)
Nonfarm Private Payr, January (8:30): 237K actual versus 175K expected, 165K
prior (revised from 144K)
Unemployment Rate, January (8:30): 4.8% actual versus 4.7% expected, 4.7%
prior (no revisions)
Avg. Hourly Earnings, January (8:30): 0.1% actual versus 0.3% expected, 0.2%
prior (revised from 0.4%)
Average Workweek, January (8:30): 34.4 actual versus 34.3 expected, 34.4
prior (revised from 34.3)
Factory Orders, December (10:00): 1.3% actual versus 1.4% expected, -2.3%
prior (revised from -2.4%)
ISM Services, January (10:00): 56.5 actual versus 57.0 expected, 56.6 prior
(revised from 57.2)

February 7 - Tuesday
Trade Balance, December (8:30): -$45.0B expected, -$45.2B prior
JOLTS - Job Openings, - (10:00): 5.522M prior
Consumer Credit, December (15:00): $19.4B expected, $24.5B prior

February 8 - Wednesday
MBA Mortgage Applica, 02/04 (7:00): -3.2% prior
Crude Inventories, 02/04 (10:30): +6.500M prior

February 9 - Thursday
Initial Claims, 02/04 (8:30): 250K expected, 246K prior
Continuing Claims, 02/04 (8:30): 2064K prior
Wholesale Inventorie, December (10:00): 1.0% expected, 1.0% prior
Natural Gas Inventor, 02/04 (10:30): -87 bcf prior

February 10 - Friday
Export Prices ex-ag., January (8:30): 0.4% prior
Import Prices ex-oil, January (8:30): -0.2% prior
Mich Sentiment - Pre, February (10:00): 97.9 expected, 98.5 prior
Treasury Budget, January (14:00): $55.2B prior

End part 1 of 3
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